I was reading this glaring article in Mumbai Mirror, a Mumbai based Newspaper from Times of India. If it of course, an undeniable fact that India is emerging as the global back-office of the Internet-Technology Industry and the backbone to this is the skilled yet economical workforce it has in abundance. However, industry experts opine that it will take ages before it can catch up with the global giants in terms of productivity. Research and Studies have revealed that, an American Techie is about 10 times more productive than their Indian counterparts.
Among the top five Indian IT Companies - TCS, Infosys, Wipro, Satyam Computer and HCL Tech - TCS is the biggest in the terms of annual revenue, but Wipro steals the show in terms of revenue per employee. But even Wipro’s per employee revenue of just over $51,000 gets dwarfed when compared to the fortune 500-listed IT companies in the US, where an employee contributes at least $100,000 to the company’s annual turnover.
The figure for TCS stood at close to $48,000, with annual turnover of $4.3 billion and head count of over 89,400 employees at the end of last fiscal. Wipro had annual revenues of $3.5 billion and total head count of over 67,800 people last year.
Infosy’s per employee contribution was close to $43,000 with a total revenue of $3.1 billion and over 72,000 employees. The average revenue per employee (ARPE) of the five largest it earners in India stood at $42,000 last fiscal year, against $410,000 in the top five in the US - HP, IBM, DELL, Sun Microsystems and EDS. Each employee brings in a whopping $587,555 at Hewlett Packard (HP), which recorded over $91.6 billion in revenue last year with a total head count of 156,000 employees.
Incidentally, US giants like HP, IBM and DELL have a significant portion of their head count in India. The market observers believe that factors like high attrition rates of over 12 per cent and under-untilisation of resources are acting as a major hurdle to achieve high employee productivity for Indian firms. In the US, California-based HP is followed by IBM at the second with $91.4 billion of revenue, which results in ARPE of about $257,000 with 355,766 employees.
World’s second largest PC market DELL occupies the third position with revenue of over $57 billion and has managed APRE of over $693,000 with a total of 82,290 employees last year. Even the fourth and fifth highest earners - Texas-based Eletronic Data Systems (over $21 billion) and Sun Microsystems ($13 billion) have each employee contributing about $163,000 and $344,000 respectively.
However, it may be noted that the Americans were way ahead of India in the IT field, India started off IT in a big way recently. Though there are lot of catching-up to do, India is on a sprint mode and is catching up fast.
Don't like it? There are lots of published articles, pick a random one.
Brajeshwar posted this article
on Wed, May 23rd, 2007 at 1:33 am
Categorized under Business, India and has the following tags
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Hello Sir,
Nice post. I agree that India is developing quite well.
I wanted to know how do you put polls in your posts. I want the same poll theme as yours to use it in Blogspot.
Thanks.
Please send me a Joost invite. I’m trying to stream quasi high def video and the centeral server model is not working well.
Thanks
Joe
@Avinash - The Poll is done using a Wordpress Plugin called WP-Poll and I am sure it cannot used on Blogspot. Why not look at some Poll Service which can be used on any site;
Ok, I don’t agree to it - India is no way developing, but IINDIANS are developing!
Thanks .. Will check it out ..
Considering the meat of the explanation in the article, the title of the post is a wrong one. One cannot compare the $ with the Re and then start making comparisons based on that. To me, productivity is ‘how -much-got-done’, rather than ‘how-much-did-i-get’. Foreign exchange rates are variable and depend on various factors and if one starts quoting those figures then the boardroom meetings should be interesting. Consider this, two developers start working on a project and finish on par. Is the article suggesting that due to the difference in exchange rates, the american developer is the more productive one. Or considering that the Re is appreciating against the $, the same work is suddenly more productive the day after cause RBI thought it was right time for market intervention.
I know you have just quoted from a tabloid (Mumbai Mirror is a tabloid!), but one needs to be more responsible.
@Anon - First, let me tell you that I feel sad as much as you seeing such figures about India. However, here is the small maths of the 2 tops India Vs. US companies mentioned in the article.
$48,000 (TCS) / $587,555 (HP) = 1/12.2
Let’s not confuse the Rupee/Dollar issue as both are converted to US Dollars. Now, both the Indian and US Developer have same number of hours per day and they work more or less on the same products or rather type of work. So, the Production/Output should be the same from the same type of workers (Indians or Americans).
Anyway, I know the fact that the US counterparts are paid higher but that should not be the reason for us Indians to do less. Should we?
This has nothing to do with Foreign Exchange Rates as far as I can tell. Nonetheless, this is a study result of the general workers and I can openly say that they are lots of Indian Techies who are indeed way better than any American Techie!
Just Dugg it, some really useful facts.
I have been working in the Polish IT industry for as long as I have lived here (14 years) and I think India is doing very well compared to most Polish regions.
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I just love how your title claims americans are 10 times better than indians, and you restate that claim in your article again, but give no backing support to these claims..
the rest of your article has little to nothing to do with productivity or anything relating to the subject. I just dont understand how someone could make such a sweeping comment that is bound to be insulting without ANY backing facts, etc.
I agree with the news article , we Indians lack planning , branding and market selection.
We chase volumes , where as our counterparts chase high quality high intelllect work.
Which ever area we enter , we think only way to get business in by quoting lower prices.
Cool blog! Can I please have a Joost invite.
Well, while the dollar-value contributed by employees might be lower in India, isn’t that simple fact the reason for India’s competitiveness in the software industry?
While it’s unfortunate, it’s still true that India’s more the quantity player than the quality player when compared to the best of the Industry in the US, Europe and Japan.
PS: A joost invite’d be much appreciated
Could you possibly help an American to narrow that productivity gap by inviting him to Joost?
jamebr02
atyahoo.comThanks!
I agree,it seems the quantity is high whilst the quality is lower. but is this due to the lower pricing making developers cut corners?
BTW a joost invite would be kinda cool
Revenue per employee is not the measure of producivity
Don’t take everything that these newspapers publish at face value
Most of It is bull***t
If one employee leaves Infosys and joins IBM, does he become 10 times more productive overnight — just because the same work he does is billed at a higher rate by IBM?
just apply common sense.
Very interesting.
I wonder if Americans will be 10x better
Joostusers than those from the Indian sub-continent, if you catch my driftPlease?
Thanks
-O
Hi Brjeshwar,
I disagree with the claim. What I see is that the American counterparts either do not need to deal with the same complexity or same amount of work. They get a very focussed chunk of work while Indians here are expected to do more work with more variety in less time. Its difficult to see an American who knows it all - while it is rare to see an Indian who usually knows a lot.,
Thanks,
Saumitra
I have to say that I found this shocking. I am constantly hearing (and seeing on TV) about people outsourcing their work to India. I am sure that they are going to “catch up” though, as they are doing the exact same work as Americans are. Thanks for sharing, great post!
Dear Brajeshwar,
Your analysis/comparison is fundamentally flawed. You are trying to compare Apples to Oranges.
The Indian companies are service providers and that too for the work that is considered fit to be done at a lower cost. Whereas the US counterparts corner the more meatier portion of the work, wherein the revenue is more.
If and when Indian companies move up in value chain or realise their revenue from products then the comparison can be meaningful.
I would too would disagree with the article’s analysis for the simple fact that Indian so called IT companies are in reality not IT companies, but just back-end operations.
Until we don’t get into product creation marketing ourselves and continue to simply carry on only execution of projects on behalf of the west, we will never get the kind of productivity per employee or per shareholder for that matter.
Post yours